Moody's cut late on December 15 its outlook on South Africa's Baa2 government issuer ratings to negative from stable in yet another blow to Africa’s best developed economy, which suffered downgrades from the other two major global rating agencies just 11 days earlier.

The main reasons for the worsened outlook are increased probability that growth will remain low for a prolonged period of time due to the structural challenges facing the mining industry and other sectors and rising risk of fiscal slippages in the face of both slower growth and growing political pressures, Moody’s said in a statement.

The agency’s decision to keep South Africa at Baa2, two notches above junk and one notch above the ratings of S&P and Fitch, is based on the country's track record of sound macroeconomic policies. Moody’s noted that South Africa’s credit metrics are still roughly in line with similarly rated peers and the external position is manageable, despite a steep depreciation of the rand and heightened global risk aversion to emerging market exposure, thanks to moderate foreign currency debt exposure and still sufficient capital inflows to finance the current account deficit.

Moody’s acknowledged that although economic growth remained disappointing in recent years, “spending restraint and the buoyancy of fiscal revenues to date has led to only marginal deviations for budget deficits and debt”. The recent reappointment of Pravin Gordhan, finance minister in 2009-14, on the post “supports the contention that spending discipline will be maintained”, it said.

On December 4, Fitch cut South Africa’s rating by one notch to BBB-, citing a further weakening of both GDP growth performance and growth potential estimates. The same day, S&P affirmed South Africa at BBB-, but revised its outlook from stable to negative, bringing the country closer to losing its investment grade status.

All this happened before President Jacob Zuma dismayed global markets by suddenly firing respected finance minister Nhlanhla Nene, replacing him with an unknown and inexperienced David Van Rooyen, and, after four days of severe market turmoil, bringing back Gordhan on the post. Although the latest move calmed markets, Zuma’s indecisive and short-sighted decision-making brought tremors throughout the ruling African Nation Congress (ANC).

On December 14, Fitch said that “the reappointment of Gordhan does not remove all the uncertainty over government effectiveness and the coherence and credibility of economic policy generated during a turbulent week”.

Meanwhile, a number of #ZumaMustFall marches are set to take place on December 16, a public holiday, across South Africa.